Hi DC1 - The reality is that in most placements there are short term profits to be made - Like all things in life there is the one that may not work. I think the placements to stags went early and probably at a profit or at least break even. Its a change of direction I see in this one. Often the fund may have expectations that are greater than the company can deliver - That is why I sometimes have invested in smaller funds because they don't limit themselves and can have longer term plays in their bag of tricks. Yes they definitely sold at a loss as I understand it but I think they expected a lot more fireworks from the the company (PGC) there were a lot of companies they were looking at or certainly more than they acquired at the end of last year they said that they were looking at two I think. They only acquired one I believe - Now They are saying they are advanced on one and others in the pipeline. I just think it takes longer in specialised areas than it does elsewhere.
So what am I saying - I think the stags took the drive out of the share price (remember is was 44.5c when the 37c was the placement price) - that I blame on badly matching the placement. But they drove the volume into the market before the interim and just after the interim. That stopped it really holding onto 44c and I think it put the placements at risk. I think for whatever reason- share price or disappointment the larger player sold. I sold some stocks to cover some CGT profits - Not PGC. This was not one of them but my average was/ is not 37c - had it been I am not sure I would not have sold some as well - certainly those that had 37c linked to them. So no I don't think selling was a good idea but lest assume that we look at 1 million shares the differential assuming around 23c was the selling price. Thats $140,000 loss you pick up and a saving of $42,000 per 1 million shares - Not big but it does clear your way for next year. This would not have been the only stock they got out of. Had the stock been 37c - who knows but they may well have stayed in.
As regards the BOT - that is strange as I am not sure who would deploy one on a low volume stock like PGC - However I have recently noticed one on SOL as well and it also seems to want to bridge upwards rather than push the price downwards.
As regards the announcement: Well I think it vindicates management as it again reiterates that the $1.7 plus would be reached - That is now cast in stone. The replacement of an existing facility - That will save 4% plus thats a good start - In addition they used part of the $10 million facility to repay a loan - that means that they can borrow $2million cheaper than the $1.2million. The fact that they had $3million in the bank suggests that they need around $10 million for investment and working capital - That is a good start in my opinion and should help build the plan.
The market wont react until the deal is done and the results are out but if it looks good than I think we can expect the share to climb back towards the 37c at least.
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